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Uganda’s Inflation Rises to 7.2%

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Bank of Uganda Governor, Emmanuel Tumusiime Mutebile

Uganda’s inflation for May 2017 as measure by the change in consumer price index has increased to 7.2% from 6.8% in April 2017.

According to Bank of Uganda, cialis 40mg this rise in inflation is largely attributed to a sharp increase in food prices and high energy prices.

While reading the monetary policy statement at the BOU head office in Kampala, pilule Prof. Emmanuel Mutebile, the BOU governor said the high food prices which resulted from long droughts that hit the country in 2016 and destabilized agriculture production has affected the economy deeply.

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“Food crops inflation has risen to 23.1% from 21.6% in the month of April. This is largely the impact of adverse weather conditions on production. Also energy, fuel and utilities inflation has risen from 5.3% in April to 7% in May,” Mutebile noted.

He added; “however, the annual core inflation has remained relatively stable increasing slightly from 4.9% in April to 5.1% in May. This is due to stability of the exchange rate and subdued domestic demand although this is contributed to slowed economy.”

The country’s Gross Domestic Product (GDP) growth has also declined according to the estimates released by Uganda Bureau of Statistics.

The economy is estimated to grow by 3.9% in the 2017/2018 financial year compared to a growth rate of 4.7% in the 2015/2016 financial year.

The slowdown in growth is also attributed to drought coupled with slow implementation of public investments project and weak private sector credit growth.

However, Mutebile noted that the economy is expected to pick up in 2017-2018 to 5% if;  the weather conditions stabilize, implementation of public investments projects efficiently improved and high foreign direct investments particularly in the oil sector, recovery of private sector growth and reduction in the interest rates due to educed government borrowing.

Mutebile said this target will be possible with the easements of the monetary conditions.

“Average lending rates have declined to 20.5% in April 2017 from a peak of 25.2% in February 2016. Also moderation of food prices is expected over the near to medium term. Once those are controlled, we will see an improvement in economic growth,” Mutebile said.

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